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Especially so for an investment like housing, where rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "

Especially so for an investment like housing, where rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would. Sorry for the barb, but that meme (your house as an investment) really bothers me, because it has the potential to do a lot of damage. It's like penny stocks. Sure you can make money if you really know what you're doing or get lucky, but by and large the idea that it's a good investment originates with people who've a financial interest in convincing you to buy some.

djrogers 11y ago
>rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.
- avn2109 11y ago
  Is this true in all countries, or just the ones (like my country, the USA) where the real estate market is rigged by various government/incumbent entities?
- bunderbunder 11y ago
  Yes, but if you're looking at them as an investment then you need to look at the overall picture. Just looking at prices over time is interesting, but it doesn't give the financial picture from the perspective of a homeowner because it ignores taxes, maintenance and repairs. Once all that's factored in the picture tends to get a lot less rosy. For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.

djrogers 11y ago

>rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.

avn2109 11y ago
Is this true in all countries, or just the ones (like my country, the USA) where the real estate market is rigged by various government/incumbent entities?
bunderbunder 11y ago
Yes, but if you're looking at them as an investment then you need to look at the overall picture. Just looking at prices over time is interesting, but it doesn't give the financial picture from the perspective of a homeowner because it ignores taxes, maintenance and repairs. Once all that's factored in the picture tends to get a lot less rosy. For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.